When Does the Statute of Limitations Start for PPP Fraud? It's More Complicated Than You Think

If you received a PPP loan in 2020 and did something questionable, you've probably been counting the years. Five years, right? That's the typical federal fraud statute of limitations. So by 2025, you're in the clear.

Wrong. Completely wrong.

At Spodek Law Group, we've had dozens of clients come to us with this exact misconception. They beleived they were safe. They thought the clock had run out. Then they got a target letter or watched federal agents show up at their door. Our mission is to give every client the honest truth about their legal exposure - even when that truth is harder than they expected.

Todd Spodek and our team understand exactly how statute of limitations calculations work in PPP fraud cases. And trust me - it's far more complicated and dangerous than most people realize.

The Basic Rule That Doesn't Apply Anymore

Here's the thing. Traditionally, wire fraud - which covers most PPP fraud cases - has a five-year statute of limitations under 18 USC 3282. Bank fraud has ten years under 18 USC 3293. If the government dosent charge you within that window, they cant charge you at all.

Sounds simple right? Apply for PPP loan in April 2020, commit fraud, and by April 2025 youre home free.

Except Congress changed the rules in 2022. And they changed them retroactively.

The COVID-19 EIDL Fraud Statute of Limitations Act of 2022 extended the limitations period for PPP and EIDL fraud to TEN years. Not five. Ten. And this extension applied to crimes that had already been committed.

Let that sink in.

You committed fraud in 2020 thinking you had five years of exposure. Then in 2022, Congress reached back in time and extended your exposure window to 2030. The rules changed after you played the game.

OK So When Does the Clock Actually Start?

This is where it gets really complicated. Most people assume the statute of limitations starts when they submitted there PPP application. Makes sense on the surface. Thats when the fraud happened right?

Not necessarily.

The clock starts when you made your LAST false statement related to the fraud scheme. Not your first. Your last.

Think about everything that happened after you submitted your application:

The Forgiveness Application: You applied for loan forgiveness. You made certifications about how you spent the money. You submitted documentation. If any of those statements were false, the clock restarts from that date.

Ongoing False Statements: Every time you communicated with the lender or SBA about your loan, you potentially made statements. If any were false, that's a new starting point.

Tax Returns: You reported PPP-related income or expenses on your taxes. If those reports were inconsistent with what you told the SBA, that's potentially another false statement.

Someonewho received a PPP loan in April 2020 but didn't submit for forgiveness until 2021 mighthave theire limitations clock running from 2021, not 2020. Add ten years. That's 2031.

The Continuing Offense Doctrine

Federal prosecutors love the continuing offense doctrine.Here's how it works:

If a fraud scheme involves multiple acts over time, the entire scheme can be treated as a single "continuing offense." The statute of limitation doesn't start until the LAST act of the scheme.

For PPP fraud, the scheme might include:

• The original false application
• Follow-up communications with the lender
• The forgiveness application
• Ongoing misrepresentations about fund usage
• Attempts to conceal the fraud

Each of these could be considered part of the same continuing scheme. And the clock dosent start until the last one.

This doctrine can extend your exposure window by years beyond what you expected.

Why Bank Fraud Charges Matter More Now

Heres a tactical reality many defendants dont understand. Prosecutors have choices about which charges to bring.

Wire fraud: five-year limitations period (or ten after the 2022 extension) Bank fraud: ten-year limitations period

If prosecutors are approaching the edge of a limitations period, guess which charge theyre going to prioritize? Bank fraud gives them more time. And most PPP schemes involve both wire fraud (electronic transfers) and bank fraud (fraudulent statements to financial institutions).

Dont assume you dodged wire fraud limitations only to get hit with bank fraud charges that have a longer window.

The 2022 Extension Was Retroactive

This is the part that shocks most defendants. The COVID-19 EIDL Fraud Statute of Limitations Act didn't just extend limitations for future crimes. It applied retroactively to crimes already committed.

Is this constitutional? Defendants have challenged the retroactive application under the Ex Post Facto Clause. Courts have generally upheld it, reasoning that statutes of limitations are procedural rather than substantive - meaning Congress can extend them without violating constitutional protections.

Whether you agree with that reasoning or not, its the current state of the law, crimes committed in 2020 are subject to ten-year limitations periods.

What This Means For Your Specific Situation

At Spodek Law Group, we analyze every clients exposure window carefully. Call us at 212-300-5196 to discuss your case. Heres what we look at:

Original Application Date: When did you submit your PPP application? This is the earliest possible starting point but often not the controlling date.

Forgiveness Application: Did you apply for forgiveness? When? What certifications did you make? Any false statements here restart the clock.

Subsequent Communications: Every interaction with lenders or the SBA is examined. Emails. Phone calls. Documents submitted.

Tax Reporting: How did you report PPP funds on tax returns? Inconsistencies create exposure.

Last Material Statement: Whats the latest date you made any representation related to the PPP loan? Thats likely when your limitations period starts.

Document Retention Creates Additional Risk

Heres something most people dont consider. The SBA requires PPP recipients to retain records for six years after the date the loan is forgiven or repaid in full.

Why does this matter for limitations? Because if you destroyed documents thinking you were safe after five years, and then the government comes investigating under the ten-year window, youve created an obstruction of justice problem on top of your original fraud exposure.

Destroying documents after five years looked smart when you thought the limitations period was five years. Now it looks like consciousness of guilt.

At Spodek Law Group, we advise clients on document retention strategies that protect there interests without creating additional criminal exposure. Todd Spodek understands how document destruction becomes its own charge.

The Strike Forces Arent Going Away

Some defendants assume the government will "move on" from PPP fraud eventually. Theyll get tired of prosecuting. Resources will shift elsewhere.

Dont count on it.

The Department of Justice established dedicated COVID Fraud Strike Forces in 2021. These units are well-funded and staffed with experienced prosecutors. They're not going anywhere. In fact, many of the biggest cases are just now working their way through the system.

The SBA Inspector General has a massive backlog of investigations. Cases referred in 2021 and 2022 are still being processed. New referrals continue to come in.

Federal prosecution is slow. The fact that several years have passed since your loan doesn't mean you avoided detection. It might just mean your case hasn't reached the top of the pile yet.

Common Misconceptions We Hear

"My loan was forgiven, so I'm in the clear."

Wrong. Forgiveness doesn't immunize you from fraud prosecution. It might actually extend your exposure if you made false statements in the forgiveness application.

"The amount was small, so they wont bother."

Wrong. Prosecutors have charged defendants who received loans under $20,000. The amount matters for sentencing, not for whether they charge you.

"Nobody is looking at old cases anymore."

Wrong. DOJ is actively prosecuting cases from 2020 right now. The statute of limitations extension specifically enables this.

"Five years passed, so Im safe."

Wrong. The ten-year extension applies. And the clock might run from your forgiveness application, not your original application.

"I used a preparer, so its there fault."

Partially wrong. Preparer fraud can be a defense, but you still signed the application. You still certified the statements. Blame-shifting has limits.

What To Do If Youre Worried

If you received a PPP loan and have concerns about potential fraud exposure, heres what we recommend:

Step One: Accurate Assessment

Get an honest evaluation of your exposure. Not what you want to hear - what you need to hear. At Spodek Law Group, we provide realistic assessments of limitations periods and prosecution risk.

Step Two: Document Review

Gather everything related to your PPP loan. Original application. Supporting documents. Forgiveness application. Communications with lenders. Tax returns. The more complete the picture, the better we can advise you.

Step Three: Timeline Analysis

We calculate when the limitations period actually expires based on your last false statement, the applicable statutory provisions, and any continuing offense considerations.

Step Four: Risk Mitigation

Depending on your exposure, there may be steps to take now that improve your position if you are eventually charged. Proactive defense preparation matters.

Step Five: Ongoing Monitoring

We help clients understand warning signs that an investigation is approaching. Target letters. Grand jury subpoenas. Interview requests. Knowing what's coming helps you respond appropriately.

The Bottom Line

If you committed PPP fraud in 2020 and think you're safe because five years have passed, you need to recalibrate immediately. The ten-year statutory extension, combined with continuing offense doctrines and the forgiveness application timeline, means many defendants are exposed well into the 2030s.

This isnt fear-mongering. Its reality. And the sooner you understand your actual exposure window, the better you can protect yourself.

Call Spodek Law Group at 212-300-5196 for an honest assessment of your statute of limitations situation. Todd Spodek and our team have handled dozens of PPP fraud cases. We understand how these timelines work and how prosecutors think about them.

Your limitations period probably hasnt expired. The question is what you do about it.